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San Jose State University employee Dennis Fox poses for a portrait in front of Tower Hall at San Jose State University in San Jose, Calif., on Wednesday, Aug. 13, 2014. (LiPo Ching/Bay Area News Group)

Shaharyar Shiraz works on his laptop at San Jose State University in San Jose, Calif., Wednesday afternoon Sept. 10, 2014. Shiraz used the campus wireless to connect to the internet. The system has been upgraded though problems still persist. (Karl Mondon/Bay Area News Group

SAN JOSE — Pushed by its ambitious president, San Jose State is spending $28 million on high-tech communications systems worthy of a campus of the future — but an investigation by this newspaper shows the project was crafted largely in secret, purchased without competitive bids and adorned with pricey gadgets that many professors may not even use.

At a time of tremendous financial pressure for the university and its students, campus leaders bought some of the flashiest classroom, conference room and office equipment available. The Next Generation Technology Project — built mostly by San Jose-based Cisco Systems, a major university donor — boasts thousands of videophones costing nearly $400 each, two-way conferencing to beam in experts on giant screens, and systems to record, transcribe and broadcast lectures.

San Jose State also paid Cisco to speed up its notoriously slow and unreliable Internet service, even though the California State University system — which is coordinating Internet upgrades for its other 22 campuses — is providing similar technology at no cost to the schools, with a company that offered CSU a proposal at one-fifth the price Cisco quoted.

Campus President Mo Qayoumi, an engineer by training, has hitched his career to the promise of technological innovation embodied in the Next Gen project. But more than two years after the project’s launch, the videophones are widely unused, just five of the promised 51 high-tech classrooms have been built, and two of the campus’s major experiments in online education have fizzled.

While Cisco declined to discuss the project, Qayoumi and other campus leaders say the complicated undertaking is something to celebrate, and they stress that it is not complete. “We have a great story to tell here about our campus,” said Terry Vahey, the head of San Jose State’s IT department.

But critics say it’s unconscionable for a public university to spend such great sums of money on extravagant systems and gadgets when it has been hiking fees and turning students away from classes they need to graduate. About $9 million of the cost is being paid from campus operating funds, and another $9 million will come from student fees for expensive “special session” classes offered outside the regular academic year, according to the campus chief financial officer.

“People are outraged about what’s going on,” said Rita Manning, a philosophy professor who said she finds the spending “deeply, morally problematic,” given the campus’s pressing needs.

Also troubling to Manning and others following the project is the outsize influence they believe Cisco wields at the university.

Campus leaders have penned columns for the company in the Huffington Post and appear to have used Cisco’s own marketing language to justify their choice of vendors, this newspaper found.

Cisco co-sponsored Qayoumi’s inauguration in April 2012, just as the deal was under development, and flew the president to Australia for a conference in early 2013.

A veteran campus IT employee, one of a handful who worked with Cisco on early tests of the equipment, said he watched the university defer to the company about the products and services it needed.

“I’ve worked in central IT since the middle of 1996, and I’ve never seen anything like it before,” said Dennis Fox, who later filed whistle-blower complaints with the California state auditor about the no-bid deal.

A deal is made

Qayoumi set the project in motion soon after moving to San Jose State from his post as president of Cal State East Bay in July 2011.

The need for updated technology, he said, was a recurring theme in 49 town hall meetings that fall about San Jose State’s future.

But rather than launch a public bidding process, Qayoumi and university CFO Shawn Bibb say they met privately with industry leaders — whom they won’t name — and determined by early 2012 that Cisco was the best company for the complicated job.

By their own accounts, they never asked Cisco’s competitors for quotes.

“We didn’t go out to a bunch of different companies and ask them for their pricing,” Bibb said. “Once we decided who our partner was going to be, then we went out and got the best pricing.”

Getting the “best pricing” meant comparing discounts offered by various distributors of Cisco equipment — the tech giant doesn’t usually sell directly to customers. The university chose Nexus IS, which offered an initial 61 percent discount.

In favoring Cisco, San Jose State was opting out of CSU’s efforts to provide Internet upgrades at all of its universities — an ongoing project that, because it was centrally funded, would have cost San Jose State nothing.

San Jose State officials have noted that the CSU project included only Internet upgrades, not many of the other features San Jose State wanted, such as a new phone network to replace five outmoded systems. Asked why they didn’t simply buy those features as add-ons, university officials said they didn’t know the scope of the CSU project in time — a claim that information from CSU contradicts.

Unlike San Jose State, CSU sought competitive bids for its project, and Cisco — which had provided wireless equipment to the system in previous years — fared poorly. In February 2012, the company submitted a proposal to CSU that was five times higher than that of the lowest bidder, Alcatel-Lucent, a disparity first reported in the Network World blog. CSU chose Alcatel-Lucent two months later.

But San Jose State remained loyal to Cisco and submitted plans to the chancellor’s office in May and June justifying its decision.

CSU policy requires each campus to explain in a feasibility study “plans and procedures to encourage industry participation” and, in a solicitation plan, to justify why “full and open competition is not contemplated or achievable,” if it isn’t. This policy is intended to help ensure that universities — which are exempt from the state’s Public Contract Code for IT projects — get a good deal.

But San Jose State didn’t detail in its submittals how it encouraged Cisco’s competitors to participate or why it went the no-bid route.

Instead, the feasibility study simply said, “San Jose State executive management, along with Cisco leadership, spent a great amount of time discussing the synergies and benefits of a partnership.”

That was good enough for CSU. State university officials were unable to provide documentation of their decision, but it came swiftly: The feasibility study was dated June 21, 2012; about a week later, San Jose State signed its first contract.

In the next four weeks, the campus ordered more than $16 million in equipment, systems and services from Nexus, according to purchase orders reviewed by this newspaper.

Meanwhile, with no official word on the project, the rumblings had started among IT employees, who say they normally would have been consulted about such an extensive deal. Finally, on Aug. 13, the administration held a forum for those employees, billing it as an opportunity to “dispel rumors” about the “strategic partnership with Cisco.”

Fox, the campus IT employee, said he asked tough questions about the process and the choice of technology at the meeting. When he raised them again in a follow-up message to the CFO, Bibb replied in a manner that Fox found intimidating.

“I must say I am dismayed that you would come to ‘question the wisdom and legality of this decision’ without any facts,” Bibb wrote in an email Fox provided to this newspaper. “… It concerns me that I have an employee in a key role in our organization that, without any facts, draws such negative conclusions.”

The rest of the campus didn’t hear about the deal officially until an announcement Sept. 13, 2012.

And it wasn’t until this past spring — nearly two years after San Jose State submitted its plans to the chancellor’s office — that the administration surveyed faculty about what they needed from a new communications system. By then, the controversy had spread far beyond the IT department, tainting the Next Generation Technology Project.

Professor Rachel O’Malley, who heads the environmental studies department, expresses her displeasure by keeping her videophone unplugged. She is not alone: Most of the professors interviewed for this story say that in an age of FaceTime and Skype, the fancy phones are simply unnecessary.

“It was an insult,” she said. “There was no faculty consultation I was aware of. It was just done.”

Too much influence?

Campus critics of the deal say there’s a clear reason it unfolded as it did: Cisco has enormous influence over the university’s leaders.

This newspaper found numerous examples of a cozy relationship. For instance:

Cisco paid $2,800 for Qayoumi to travel to Australia in 2013. Qayoumi said a group of Australian academics invited him to the country after visiting San Jose State and asked Cisco’s Australian arm to fund his trip.

Before the deal with San Jose State was finalized, Cisco paid $2,000 for a table at Qayoumi’s inauguration; Bibb and Vahey were to be seated there as well, according to a document about the donation.

Qayoumi and Vahey have written advertorials — essays for Cisco-purchased advertising space — in the Huffington Post about the power of technology.

Qayoumi has been a featured speaker — apparently for free — in Cisco virtual education forums since at least 2010, when he was president of Cal State East Bay.

Cisco donated about $400,000 to the campus between Qayoumi’s arrival in the summer of 2011 and this past July, according to campus foundation records. Its CEO, John Chambers, has said publicly that about 6 percent of its employees are SJSU alumni.

Chambers received an honorary doctorate from San Jose State in 2013 and addressed students at a campus event. The award was based on a recommendation from a CSU trustee, according to Qayoumi and CSU.

It’s also clear that Cisco played a role in the Next Generation Technology Project that goes beyond simply selling equipment. One indication of the close connection emerges in the solicitation plan San Jose State sent to the CSU chancellor’s office in May 2012.

A key section of the college’s analysis includes a description of the company nearly identical to language Cisco has used to describe itself.

“As technology changes the way people everywhere learn and teach,” the San Jose State plan says, “Cisco uses their core expertise in networking technology to improve both the delivery and quality of education — better preparing students of all ages with the skills they need to succeed in a global, technology-driven society.”

That mirrors a description the company submitted to a website for a new technology education initiative in North Carolina — except for two changes: “its” instead of “their” and “equipping” instead of “better preparing.”

Bibb said he was “absolutely certain” Cisco didn’t have a hand in crafting the proposal submitted to the chancellor, but he didn’t have an explanation for the similarities.

Fox says Cisco’s sales team also heavily influenced the project’s design, judging from the meetings he attended with company employees.

“Right from the get-go, Cisco defined what was going to be done on campus,” Fox said. “Our (technology chief) didn’t do any reality-checking. Cisco said, ‘Here’s what you should do,’ and the president and (his administration) says, ‘OK, that’s what we’ll do.'”

San Jose State administrators concede that Cisco offered guidance on design but insist everything was vetted by university employees.

“Did (Cisco) have input in putting the design together?” Bibb asked. “Yes, but our IT team had a say.”

Worth debated

Of all the questions about the Next Gen project, one remains unanswerable: Will it turn out to be worthwhile?

Qayoumi is betting heavily that it will. Since he came to the university in 2011, he has espoused a technocentric vision for the campus.

In a 2012 white paper, “Reinventing Public Higher Education: A Call to Action,” Qayoumi called for California’s colleges to standardize dozens of popular courses online and make them free to anyone, a notion embraced by Gov. Jerry Brown and others looking for ways to lower college costs.

Qayoumi echoed those sentiments in the September 2012 news release about the Cisco deal. “Never before in the history of higher education has technology provided such important challenges and opportunities,” the president said. “We must reinvent teaching, learning and educational delivery systems.”

But so far, the reinvention — and with it, some of the justification for San Jose State’s enormous investment in classroom technology — has lagged amid concerns about the educational benefits of online offerings.

After its splashy debut in early 2013, San Jose State’s pilot project with Udacity to open for-credit entry-level math courses to the public flopped after two-thirds of the students in the experiment failed the class. And plans to offer more so-called “flipped courses” using online lectures from the MIT-based nonprofit edX went nowhere after an April 2013 news conference announcing the expansion.

Also on hold is the Center for Excellence in Adaptive and Blended Learning, which the campus was to develop with edX to study the uses of technology in teaching, a campus spokeswoman confirmed.

Some professors continue to believe the technology will enrich their students’ education. Journalism professor Bob Rucker says he and his colleagues — whose building has one of the five high-tech classrooms — see great potential in a system that allows a guest lecturer or client to interact with a class live from anywhere. And the ability to review lectures online also will help students, especially English learners, he said.

The campus reports that it has spent more than $25 million of its $28 million on the project. But Provost Andy Feinstein, who was appointed in April and helped administer the faculty survey, said it is still possible to make adjustments based on professors’ needs.

“I want to understand whether we are using these resources appropriately and how we can move forward with the plan,” he said.

Yet the system’s critics are unassuaged. They say that for every million dollars the campus has spent on flashy technology that few use, it could have offered more than 150 new classes.

“It basically comes down to poor priorities and poor management,” said San Jose State history professor Jonathan Roth. “I would say the vast majority of money that they’re spending is wasted.”

Adding to concerns about waste is up to $800,000 worth of missing Internet equipment, including 500 of the 2,270 wireless access devices the campus ordered. Campus police have been investigating since March and on Wednesday arrested 39-year-old Jose Farias, a campus IT employee, on suspicion of burglary and embezzlement.

But for all the questions about the contract and its value, Qayoumi said he wouldn’t have done anything differently.

“The Next Gen Project was very much needed for the university,” he said. “To the best of our knowledge, we did the best due diligence to do what’s required.”

Katy Murphy is based in Sacramento and covers state government for The Mercury News and East Bay Times, a beat she took on in January 2017. Before that, she was the news organization's higher education reporter, writing about UC, CSU, community colleges and private colleges. Long ago, she covered Oakland schools and other K-12 education issues.